Basically, with no changes to current law, taxes will rise for
everyone, and after tax, inflation-adjusted income for the
average American will drop to 1998 levels.

As Leonhardt puts it: "All in all, the end of 2012 will be unlike
any other time in memory for the federal government."

At this point, many of our readers will already be familiar with
the stakes. It's not just the Bush tax cuts that are due to
expire, but mandatory spending cuts agreed to during the debt
ceiling debacle are supposed to kick in as well.

With Mitt Romney in the White House and a Republican
House, the uncertainty might be less. Unless Congressional
Republicans and a defeated Mr. Obama somehow came to a deal, they
could wait for him to leave town before retroactively extending
the Bush tax cuts, so long as they could win over a small number
of Democratic senators. Republicans could likewise undo the
Pentagon cuts.

To hold down the deficit, Mr. Romney and Congress could then cut
domestic programs, including Medicaid, more sharply than Mr.
Obama has. But recent history — both Mr. Reagan’s administration
and the second Mr. Bush’s — suggests that Republicans would
probably not find enough spending cuts to offset their tax cuts
and instead would accept larger deficits.